Plaintiff
Signature Financial LLC filed this breach of contract and
replevin lawsuit against Defendants Auto Trans Group Inc.
(“ATG”) and Violet Mihaylova for damages
resulting from Defendants' alleged default on three loan
agreements and related guarantees. Presently before us is
Plaintiff's motion for default judgment and entry of an
order of replevin. (Dkt. No. 9.) Also before us is
Plaintiff's oral motion for Defendants to provide a
status report regarding the Collateral[1] subject to the
above-captioned action. (Dkt. No. 17.) For the reasons set
forth below, we deny Plaintiff's motion for default
judgment, continue Plaintiff's motion for an order of
replevin, and grant Plaintiff's motion for a status
report regarding the Collateral.

BACKGROUND

Plaintiff's
claims center on three lending agreements to ATG to purchase
vehicles. (Compl. (Dkt. No. 1) ¶ 6.) First, Plaintiff
and ATG entered into an Equipment Financing Agreement on May
9, 2014 (“Loan No. 1”), under which ATG agreed to
pay Plaintiff the principal sum of $152, 000.00, plus
interest, over a period of sixty months, with consecutive
monthly installments in the amount of $3, 009.07.
(Id. ¶ 7.) To secure ATG's obligations
under the terms of the loan agreement, ATG granted to
Plaintiff a security interest in two 2012 Freightliner
Cascadia vehicles. (Id. ¶ 8.) Plaintiff alleges
it perfected its security interest in the collateral by
retaining possession of the Certificates of Title, copies of
which were also filed with the Illinois Department of Motor
Vehicles, and by filing a UCC-1 Financing Statement with the
Illinois Secretary of State. (Id. ¶ 10.)
Plaintiff alleges Mihaylova then executed a Continuing
Guaranty pursuant to which she unconditionally guaranteed to
Plaintiff the prompt payment and performance of the Loan No.
1 obligations. (Id. ¶ 12.)

Plaintiff
alleges ATG then entered into two additional loan agreements
on February 18, 2015 (“Loan No. 2”) and November
13, 2015 (“Loan No. 3”) with third-party River
Valley Capital Corporation (“River Valley”).
Under Loan No. 2, ATG agreed to pay River Valley $141,
680.00, plus interest, over a period of sixty months, with
consecutive monthly installments in the amount of $2, 822.18.
(Id. ¶¶ 13-14.) Loan No. 3 provided ATG
would pay River Valley $143, 000.00, plus interest, over a
period of sixty months, with consecutive monthly installments
of $2, 799.25. (Id. ¶¶ 22-23.) In order to
secure ATG's obligations under the terms of Loan No. 2,
ATG granted to River Valley a security interest in two 2015
Great Dane/Reefer vehicles, and under Loan No. 3, ATG granted
to River Valley a security interest in a 2016 Freightliner
Cascadia vehicle. (Id. ¶¶ 15, 24.) In
addition, Mihaylova executed guaranties as to both loans,
agreeing to unconditionally guarantee prompt payment and
performance of the loan obligations. (Id.
¶¶ 16, 25.) River Valley subsequently assigned to
Plaintiff all of its right, title, and interest in Loan No. 2
and Loan No. 3 and in the associated collateral and
guaranties, and Plaintiff became the successor-in-interest as
a result of the assignment. (Id. ¶¶
17-18.) Plaintiff alleges it perfected its security interest
in both loans' collateral by retaining possession of the
Certificates of Title, filing copies with the Illinois
Department of Motor Vehicles, and filing a UCC-1 Financing
Statement. (Id. ¶¶ 20-21, 29-30.)

Plaintiff
alleges ATG defaulted on each of the three loan agreements
when it failed to make the required monthly payments due to
Plaintiff under the terms of each respective agreement.
(Id. ¶ 34 (alleging ATG failed to make monthly
payments due under Loan No. 1 on August 15, 2017, September
15, 2017, October 15, 2017, and November 15, 2017), ¶ 42
(alleging ATG failed to make monthly payments due under Loan
No. 2 on August 25, 2017, September 25, 2017, and October 15,
2017), ¶ 50 (alleging ATG failed to make monthly
payments due under Loan No. 3 on August 20, 2017, September
0, 2017, and October 20, 2017).) Plaintiff asserts that as a
result of ATG's defaults, pursuant to each loan
agreement, “the entire balance of all unpaid monies due
under the terms of [the agreements] was declared to be
immediately due and payable.” (Id.
¶¶ 35, 43, 51.) Plaintiff alleges it has performed
all terms and conditions precedent, but ATG has failed to pay
any of the loan agreement obligations. (Id.
¶¶ 37-38, 45-46, 53-54.) By reason of ATG's
defaults and failure to pay, Plaintiff further contends it
made demand on Mihaylova for payment of ATG's loan
obligations. (Id. ¶¶ 58-59.) Plaintiff
alleges Mihaylova has failed to pay Plaintiff any of the loan
obligations. (Id. ¶ 60.)

On
December 15, 2017, Plaintiff filed its complaint for money
damages against Defendants and for replevin of the
Collateral. Plaintiff asserts three counts of breach of
contract against ATG in connection with its alleged defaults
under each of the three loan agreements, and one count of
breach of contract against Mihaylova for defaulting under the
terms of the guarantees. (Id. ¶¶ 33-63.)
Plaintiff also asserts a claim for replevin against ATG,
seeking to take immediate possession of the Collateral as a
result of ATG's defaults. (Id. ¶¶
64-75.) Finally, Plaintiff seeks attorneys' fees against
both ATG and Mihaylova under the terms of the loan
agreements. (Id. ¶¶ 76-79.) Plaintiff
served the summons and complaint on Defendants on January 12,
2018. (Dkt. Nos. 6-7.) On February 13, 2018, after Defendants
failed to timely file an answer or otherwise plead, Plaintiff
filed a motion for default judgment pursuant to Federal Rule
of Civil Procedure 55 and an order of replevin pursuant to
735 ILCS 5/19-104. (Default and Replevin Motion
(“Mot.”) (Dkt. No. 9).)

We held
a status hearing on February 22, 2018, during which counsel
for Plaintiff and Defendants appeared. (Dkt. No. 13.) At the
hearing, we entered and continued Plaintiff's motion for
default judgment and replevin, and ordered Defendants to
answer or otherwise plead to the complaint by March 1, 2018.
(Id.) We also granted Defendants leave to file a
response to Plaintiff's motion for replevin.
(Id.) Defendants filed an answer to the complaint
and a response to the motion for replevin on February 28,
2018. (Dkt. No. 15-16.) We held a second status hearing on
March 1, 2018 at which counsel for all parties appeared.
(Dkt. No. 17.)

ANALYSIS

I.
MOTION FOR DEFAULT JUDGMENT

Plaintiff
moved for entry of a default judgment against Defendants
pursuant to Federal Rule of Civil Procedure 55(a) and
55(b)(2). Plaintiff noticed the motion for a hearing on
February 22, 2018. (Dkt. No. 10.) At the February 22, 2018
hearing, counsel for Defendants appeared and requested an
extension of time to answer or otherwise plead to the
complaint by March 1, 2018. (Dkt. No. 13.) We granted
Defendants' request, and they timely filed an answer on
February 28, 2018. (Dkt. No. 15.)

No
entry of default was entered by the clerk under Rule 55(a),
but in any event, a default may be “liberally”
set aside for good cause under Rule 55(c), where, as here, no
default judgment was entered. Cracco v. Vitran Exp.,
Inc., 559 F.3d 625, 631 (7th Cir. 2009) (“Our
cases articulate a policy of favoring trial on the merits
over default judgment.”). Entry of default judgment is
generally justified only “if the defaulting party has
exhibited a willful refusal to litigate the case
properly.” Davis v. Hutchins,321 F.3d 641,
646 (7th Cir. 2003) (citing Hal Commodity Cycles Mgmt.
Co. v. Kirsh,825 F.2d 1136, 1138 (7th Cir. 1987)).
Although there is no question Defendants failed to timely
file their answer to the complaint, they quickly corrected
the error by appearing at the February 22, 2018 status
hearing and promptly filing their answer, which denied the
material allegations of the complaint. Furthermore, service
was not completed on Defendants until January 12, 2018, and
Defendants' answers were due February 2, 2018; therefore,
Defendants' neglect caused a delay of less than a month,
and it has not prejudiced Plaintiff or caused significant
impact on the proceedings at this point. (See Mot.
¶¶ 2-3.) See also Comerica Bank v.
Esposito, 215 Fed.Appx. 506, 508 (7th Cir. 2007).
Moreover, we granted Defendants' oral motion to file
their answer late before a default judgment was entered.
Conn. Nat. Mortg. Co. v. Brandstatter, 897 F.2d 883,
885 (7th Cir. 1990). Accordingly, we deny Plaintiff's
motion for default judgment pursuant to Rule 55(b)(2).

II.
MOTION FOR REPLEVIN

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plaintiff
has also moved for an order of replevin. Plaintiff seeks the
return of the Collateral from Defendants &ldquo;based on its
first priority, perfected lien in and to the Collateral and
its immediate right to possession due to ATG&#39;s default
under the Loan Agreements.&rdquo; (Mot. &para; 12.) Under
Illinois law, an action for replevin may be brought to
recover wrongfully detained goods or chattels. 735 ILCS
5/19-101; Carroll v. Curry, 392 Ill.App.3d 511, 514,
912 N.E.2d 272, 275 (2d Dist. 2009) (&ldquo;The primary
purpose of the replevin statute is to test the right of
possession of personal property and place the successful
party in possession of the property.&rdquo;). &ldquo;In
Illinois, replevin is strictly a statutory proceeding and the
requirements of the statute must be followed
precisely.&rdquo; Harrisburg Cmty. Unit Sch. Dist. No. 3
v. Steapleton, 195 Ill.App.3d 1020, 1023, 553 N.E.2d 76,
79 (5th Dist. 1990). To be entitled to replevin, the
plaintiff must show (1) it is the owner of the property or
lawfully entitled to possession of the property; (2) the
property is wrongfully detained by the defendant; and (3) the
property has not been taken for any tax, assessment, or fine
levied by virtue of any Illinois law, against the property of
such plaintiff, or against ...

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